Budget, vetoes on docket at NCGA

As 2025 wrapped up, North Carolina lawmakers had yet to agree on and pass a budget.

Both chambers of the General Assembly gaveled in and out for the scheduled December session without acting on the budget while also leaving six vetoes in limbo.

The Senate issued its budget plan in April, and the House dropped its budget proposal in May. The proposals were similar, including total spending of around $65.91 billion but differed on certain special projects desired by the Senate and pay raises proposed by the House.

The House passed four stand-alone budget bills during October addressing teacher pay, Medicaid and other health care spending which were not taken up by the Senate. A press release issued at the time from Senate Appropriations Chairmen Brent Jackson (R-Sampson), Ralph Hise (R-Mitchell) and Michael Lee (R-New Hanover) called the bills a “gimmick” that would result in a $2 billion deficit.

“It is our duty to pass a responsible, balanced budget,” said Jackson, Hise and Lee. “Bringing forth bills that cannot be considered and intentionally bust our state’s budget is nothing more than a political stunt.”

Tax rates and related economic triggers are the key sticking point holding up a new state budget, which has resulted in a battle of wills between new House Speaker Destin Hall (R-Granite Falls) and Senate Leader Phil Berger (R-Eden).

The current personal income tax rate in North Carolina is 4.25%. A 2023 budget compromise bill lowers that rate next year to 3.99% and drops the rate again in 2027 to 3.49%.

The impasse over the tax rates boils down to modification of the scheduled tax rate reduction triggers, as explained by Reps. Dean Arp (R-Union) and Julia Howard (R-Davie) in a recent op-ed in North State Journal.

“The House isn’t abandoning income tax cuts. Our budget keeps the scheduled decrease from 4.25% to 3.99% in 2026,” Arp and Howard wrote. “What we propose is updating the formula for future cuts so they only happen when revenue actually supports them, adjusted for inflation and population growth.

“It’s a simple, commonsense adjustment with a big payoff — preventing North Carolina from sliding into multibillion-dollar shortfalls.”

Corporate tax reductions are not forgotten in the tax rate fight, and both chambers seem willing to make minor adjustments with an eye on the potential for falling future state revenues.

The corporate reductions went from 2.5% to 2.25% beginning in 2025. The rate is reduced again in 2026 and 2027 to 2%, and it drops to 1% in 2028 and 2029. The corporate rate would drop to zero after 2029.

Both leaders have said they are open to negotiating, but outward appearances seem like the two lawmakers are locked in a state of radio silence, making it unclear what it will take to break the stalemate in 2026.

In addition to the lack of activity on the budget, six vetoed bills remained in limbo in the House heading into the new year.

The six bills are the Educational Choice for Children Act (House Bill 87), Equality in State Agencies/Prohibition on Diversity, Equity, and Inclusion (House Bill 171), Freedom to Carry NC (Senate Bill 50), the North Carolina Border Protection Act (Senate Bill 153), Eliminating “Diversity, Equity, and Inclusion” in Public Education (Senate Bill 227), and Eliminating “Diversity, Equity, and Inclusion” in Public Higher Education (Senate Bill 558).

The four Senate bill vetoes have already been overridden by the Senate but require the House to hold a vote to finish the process. The two vetoed House bills haven’t had any override votes taken.

A total of 15 bills were vetoed by Gov. Josh Stein during the session, with eight overridden.

The long session also included the arrest of three people at the General Assembly: Rep. Cecil Brockman (D-Guilford), Sen. Norm Sanderson (R-Pamlico) and Diane Cook, Sanderson’s legislative assistant.

In early October, Brockman was arrested on sex crime charges. He faces two counts of taking indecent liberties with a child and two counts of statutory rape/sex offense of a 13-to-15-year-old by a defendant at least six years older than the victim.

Initially, Brockman was issued a $1.05 million bond due to being considered a flight risk. That bond was later reduced to a $250,000 secured bond. He posted that amount and was released Nov. 4.

During a court appearance, Brockman’s attorney, Alec Carpenter, claimed his client believed the victim was 18 years old. Carpenter said the two had met on the LGBT dating app Grindr, which requires affirming being 18 or older to use it.

“We do have evidence that he knew the juvenile was underage,” District Attorney Avery Crump told the judge.

Brockman was pressured to resign by Democrats and Republicans alike when the news of his arrest broke, but he refused for the better part of the month. He finally resigned his seat Oct. 31, less than an hour after a select committee was announced to investigate his removal. High Point City Councilwoman Amanda Cook was picked to fill the remainder of his term.

The same month Brockman was arrested, Sanderson was arrested by the State Highway Patrol on three misdemeanor charges: driving while impaired, an open container after consumption violation and failure to obey a traffic officer.

Sanderson, who according to court records had a blood alcohol level twice the legal limit, issued a statement apologizing for his actions. The case is still pending in Wake County District Court.

The following month, a legislative assistant to Sanderson was arrested on arson charges.

Cook, 38, was arrested by Raleigh Police on Nov​. 24 on first-degree arson charges for allegedly attempting to set two adjacent townhomes on fire in the 8300 block of Boca Point in northeast Raleigh. Her case is also pending in Wake County District Court.